Cabinet firm: Friday OK for tax hike bill

The Cabinet will stick to its plan and approve a bill Friday to double the consumption tax to 10 percent despite fierce opposition from within the Democratic Party of Japan, Chief Cabinet Secretary Osamu Fujimura said Tuesday.

The DPJ has been holding marathon internal meetings over the tax hike for nearly two weeks, but opponents are still dissatisfied with the bill and have not backed down.

Nevertheless, Prime Minister Yoshihiko Noda and his administration have firm plans to submit the bill to the Diet by Saturday, the end of the current fiscal year. “The final Cabinet meeting of this fiscal year” is Friday, Fujimura told reporters. The government’s aim “is (to approve the bill) by the end of the week, and I think it will ultimately be around that time.”

To make the deadline, DPJ executives were ready to wrap up the discussions Tuesday evening.

“The party has been holding quite lengthy discussions and the (administration) has responded by taking various measures, including submitting necessary documents,” Fujimura said.

But “whether the discussions have come to an end is up to the party,” he added.

To appease opponents to the tax hike, including kingpin Ichiro Ozawa and his followers, the DPJ executives have repeatedly revised the bill, including adding a prerequisite that the consumption tax can only be raised if the economy shows improvement.

Those against the tax hike had demanded the bill specify that the economy was logging a “nominal growth rate of 3 percent and a real growth rate of 2 percent” before the 5 percent levy was raised. Putting numerical growth targets in the bill is the final point of contention, but it is widely believed no such entries will be added.

Opposition from within the DPJ is not the only problem on the prime minister’s plate.

The DPJ’s junior coalition partner, Kokumin Shinto (People’s New Party), has openly opposed the tax hike, and its leader, Shizuka Kamei, has threatened to quit the ruling bloc.

“If it comes to the point where the government is ready to officially approve the bill, naturally the prime minister will meet with (Kamei) and seek his cooperation,” DPJ Secretary General Azuma Koshiishi said earlier this week.